Aoxing Pharmaceutical Reports Q1 Fiscal 2017 Financial Results

FOSTER CITY, CA / ACCESSWIRE / November 14, 2016 / Aoxing Pharmaceutical Company, Inc. (NYSE MKT: AXN) today announced that for the first quarter of fiscal year 2017, ended September 30, 2016, the Company reported revenues of $7,569,296, down 13% year-over-year from the revenue of $8,744,822 realized during the three months ended September 30, 2015. The year-over-year revenue decline was mainly due to lower sales for Zhongtong’an product, which represented 92.8% of total sales during the first quarter of fiscal 2017. Sales of Zhongtong’an product have been under pressure as inventories in the pipeline remain low. Our Tilidine product has not yet contributed to sales.

The Company’s net income in Q1 of fiscal year 2017 was $346,080 (or $0.00 per share), compared to $1,267,936 (or $0.02 per share) for the three months ended September 30, 2015.

Aoxing’s cash balance as of September 30, 2016 was $7,055,974, compared to $6,912,100 as of June 30, 2016, the end of its last fiscal year.

Mr. Zhenjiang Yue, Chairman and CEO of Aoxing Pharma, said, “Although the sales are currently under pressure, we believe the pipeline inventory is low and the revenue growth could recover going forward. We believe our marketing efforts for products other than Zhongtong’an, including our Tilidine tablets, could contribute more to the revenue with our market penetration.”

About the Company

Aoxing Pharmaceutical Company, Inc. is a U.S. incorporated pharmaceutical company with its operations in China, specializing in research, development, manufacturing and distribution of a variety of narcotics and pain-management products. Headquartered in Shijiazhuang City, outside Beijing, Aoxing Pharma has the largest and most advanced manufacturing facility in China for highly regulated narcotic medicines. Its facility is one of the few GMP facilities licensed for the manufacture of narcotic medicines by the China Food and Drug Administration (“CFDA”). For more information, please visit: www.aoxingpharma.com.

Safe Harbor Statement. This press release contains certain statements that may include “forward-looking statements.” All statements other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and so these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on the SEC’s website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume any duty to update these forward-looking statements.

AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

September 30,

June 30,

2016

ASSETS

(Unaudited)

CURRENT ASSETS:

Cash and cash equivalents

$
7,055,974

6,912,100

Accounts receivable, net

12,767,133

10,435,101

Notes receivable, net

1,227,593

765,317

Inventories, net

2,433,301

2,841,690

Prepaid expenses and other current assets

6,619,058

5,912,555

TOTAL CURRENT ASSETS

30,103,059

26,866,763

LONG-TERM ASSETS:

Property and equipment, net of accumulated depreciation

25,277,267

25,603,734

Deferred income tax

1,532,500

1,878,595

Other intangible assets, net

1,862,139

1,878,299

Investment in joint venture

–

4,200

TOTAL LONG-TERM ASSETS

28,671,906

29,364,828

TOTAL ASSETS

$
58,774,965

56,231,591

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Short-term borrowings

$
8,544,369

11,070,966

Accounts payable

3,137,060

2,709,819

Loan payable – bank

14,336,552

14,372,630

Current portion of loan payable – related parties

5,793

13,317

Current portion of loan payable – others

2,408,912

15,048

Accrued expenses and other current liabilities

11,406,652

9,633,750

TOTAL CURRENT LIABILITIES

39,839,338

37,815,530

LONG-TERM LIABILITIES:

Loan payable – related parties

7,495

Loan payable – others

89,941

Deferred income

322,967

340,089

TOTAL LONG-TERM LIABILITIES

420,403

340,089

Common stock, par value $0.001, 100,000,000 shares authorized, 76,209,195 shares issued and outstanding on September 30, 2016 and June 30, 2016

76,209

Additional paid in capital

73,638,151

73,629,751

Accumulated deficit

(55,947,665
)

(56,293,745
)

Accumulated other comprehensive income

1,764,235

1,723,740

TOTAL SHAREHOLDERS’ EQUITY OF THE COMPANY

19,530,930

19,135,955

NONCONTROLLING INTEREST IN SUBSIDIARIES

(1,015,706
)

(1,059,983
)

TOTAL EQUITY

18,515,224

18,075,972

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
58,774,965

56,231,591

See accompanying notes to the consolidated financial statements

AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

For the Three Months Ended

September 30,

2016

2015

SALES

$7,569,296

$8,744,822

COST OF SALES

1,514,932

1,758,079

GROSS PROFIT

6,054,364

6,986,743

OPERATING EXPENSES:

Research and development expense

377,287

377,306

General and administrative expenses

1,276,720

944,358

Selling expenses

2,577,366

2,394,346

Depreciation and amortization

119,485

131,530

TOTAL OPERATING EXPENSES

4,350,858

3,847,540

INCOME FROM OPERATIONS

1,703,506

3,139,203

OTHER INCOME/(EXPENSE):

Interest expense, net of interest income

(656,486)

(929,029)

Gain on foreign currency transactions

–

58,593

Equity in loss of joint venture, net of tax

(4,186)

(24,291)

Subsidy income

–

47,760

TOTAL OTHER (EXPENSE)

(660,672)

(846,967)

INCOME BEFORE INCOME TAX

1,042,834

2,292,236

Income tax

651,077

943,803

NET INCOME

391,757

1,348,433

Net income attributed to non-controlling interest in subsidiaries

45,677

80,497

INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY

346,080

1,267,936

OTHER COMPREHENSIVE LOSS:

Foreign currency translation adjustment

(28,020)

(669,991)

COMPREHENSIVE INCOME

318,060

597,945

Other comprehensive income attributable to non-controlling interest

(1,401)

(33,500)

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

$319,461

$631,445

BASIC AND DILUTED LOSS PER COMMON SHARE

$0.00

$0.02

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

76,209,195

69,852,302

See accompanying notes to the consolidated financial statements

CONTACT:

Aoxing Pharmaceutical Company:
646-367-1747
investor.relations@aoxingpharma.com

SOURCE: Aoxing Pharmaceutical Company, Inc.

ReleaseID: 448948

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